Three weeks later, Leo sat across from a real client—a middle-market logistics company looking to acquire a rival. The MD was sick. Priya was in another meeting. The client asked, “If we lever this at 4x debt-to-EBITDA, how long until we delever?”
The room went quiet. The other interns looked at their shoes.
He poured a fresh cup of coffee. It was going to be a long night. But for the first time, the cursor wasn't mocking him. It was just waiting. wall street prep financial modeling course
He clicked Enable Iterative Calculation . He set the max iterations to 100. He pressed F9.
Leo’s breaking point was Module 6: Debt Schedules and Circular References . Three weeks later, Leo sat across from a
He had built his model. Revenue growth was 5%. COGS followed historical averages. Depreciation was linked to PP&E. But when he added the revolver (a type of short-term loan), his Interest Expense exploded. Interest Expense ate Net Income. Net Income reduced Retained Earnings. Retained Earnings broke his debt covenants, forcing him to borrow more on the revolver, which raised Interest Expense again.
Leo laughed. It was a hollow, manic laugh. He had just simulated the cash flow of a fake donut company, but he felt like Oppenheimer watching the first atomic blast. The client asked, “If we lever this at
Finally, at 4:00 AM, he found it. A single minus sign in front of the Shareholder Revolver . He corrected it. The IRR jumped to 22.5%.